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Cyndy

Interpretation of Far 52.222.43

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I need some help interpreting Far 52.222.43. We bid on a contract which we won, only to discover afterward that the bid had wrong information in it. The fringe benefits only included the H&W amount on the WD. It had no taxes, workers comp, any other benefit like holidays, vacation nothing else. Because the WD included the EO for sick leave our bid also had the wrong hours. Now the first option has come up with a new WD attached, it increase the wages, but decreases the H&W amount. I think I am within my rights to include on the increased portion only (I think, I’d like to be able to include for the total) all the taxes (FICA, FUTA, SUTA), vacation, holiday, sick workers comp. Can I include other things like health, dental, vision….and do I have to include the decrease in the H&W? I ask about the decrease because far 52.222.43 (d) says “the decrease is voluntarily made by the contractor. Hardest REA I have ever had to write. thanks

 

 

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I'm not sure, I understand exactly what your situation is, but here are a couple of things that I think I do understand.  First, let's be careful with our terminology.  52.222-43 does not use the term equitable adjustment which is generally intended to make a contractor or the government whole and includes profit, overhead and G&A.  Instead, it refers to a price adjustment which is limited in scope.  In regard to the adjustment for an increase in increased wages, in accordance with subsection (e) of the clause, the contractor is only entitled to include the increases in "social security and unemployment taxes and workers’ compensation insurance" relating to the increase in wages in the price adjustment.  For example, the WD increases required wages from $10 @ hr. to $10.50 @ hr.  the contractor could only include the social security and unemployment taxes and workers’ compensation insurance on $0.50 @ hr. increase in its price adjustment.  The fact that you did not include these costs in your original proposal is irrelevant to the price adjustment.

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